Liquor Licensing of Street Fairs and Festivals

Street Fairs are a popular tradition in California and elsewhere, sometimes drawing tens of thousands of visitors. Street fairs typically provide food vendors, silent auctions, raffles, and live music. Some are focused narrowly as “beer and wine festivals.”

Non-profit 501c3 organizations often sponsor street fairs and festivals. Sponsors might include the “XYZ Street Fair,” a Chamber of Commerce or a business association, with proceeds going to charitable causes important to the community, such as Multiple Sclerosis.

Qualified organizations that receive the proper license or permit from the California Department of Alcoholic Beverage Control (ABC) may sell alcoholic beverages at a beverage booth, beer garden or beer/wine garden.

There is no type of “blanket” liquor license the non-profit organizer obtains to allow others to sell alcohol. Rather, each organization running a booth or beer/wine garden obtains their own license or permit. All licensing or permitting for alcohol sales is subject to prior approval by the ABC, local law enforcement and the property owner.

The licensing options are:

SPECIAL DAILY LICENSE (“Temporary License”) – Authorizes the sale of beer and/or wine for consumption on the premises (e.g., street fair or festival) where sold. Issued only to existing non-profit organizations.

DAILY ON-SALE GENERAL LICENSE (“Temporary License”) – Authorizes the sale of beer, wine and distilled spirits for consumption on the premises (e.g., street fair or festival) where sold. Issued only to political parties or affiliates supporting a candidate for public office or a ballot measure or charitable, civic, fraternal or religious organizations.

WINE SALES EVENT PERMIT (Type 81) – Authorizes Type 02 (Winegrower) licensees to sell bottled wine produced by the winegrower for consumption off the premises where sold and only at fairs, festivals or cultural events sponsored by designated tax exempt organizations.

The organization who obtains a liquor license or permit must receive all of the net proceeds from the sale of the alcohol. If there is an admission charge and it entitles patrons to obtain wine, beer and/or distilled spirits, then the net proceeds from the sale of alcoholic beverages must go to the non-profit organization. If the licensee charges a separate admission and/or sells advertising specialties (T-shirts, hats, etc.), the net profits from these sales may go to someone other than the non-profit organization.

There are numerous laws that apply, including those that prohibit sales to minors and obviously intoxicated patrons. There are also more obscure laws specific to special events. For example, the role of winegrowers, beer manufacturers and wholesalers. Participating organizations should be aware of these laws to prevent the suspension or revocation of a license or permit. The goal is a safe, legal and responsible event.

Timelines for temporary licenses and permits depend upon the license you are applying for. In general, you should apply no later than 10 days before, and no sooner than 30 days before, the event.

The forms and information for getting a special event license or permit can be found on ABC’s website. For information about getting a license or permit at certain location, you should contact the ABC district office nearest the proposed site.

Comments

I own a type 02 wine license, and operate a small tasting room on the premises. A local home brew club would like to meet in my tasting room on a day that we are normally closed to socialize and taste each others beverages. My taps would be off, and no money will change hands. Am I in danger of violating the law by permitting this use? Would it change things if I let them “rent” the space for a private party?

Ps. Thank you so much for helping people maneuver the confusing legal system. You’ve opened my eyes to several activities that I would have engaged in that could have got me in trouble due to ignorance.

Hi Lauren,
I am looking into starting a “traveling wine bar” and have many questions.
1. Is that possible in California?
2. If so, are we limited to established events such as fairs and festivals?
3. Would a catering permit (“Type 58”) AND AUTHORIZATION (Form ABC-218) be sufficient?
4. We want to sell out of a food truck, would we need to establish a “no alcohol beyond this point” area
This is all for now…..:)
Your site is very helpful THANK YOU!

We are a 501c6 civic organization that produces a “summer concert series” accompanied by a beer garden. We apply for and receive a Daily On-Sale General license for each concert, and we do sell beer, wine and distilled spirits during the concerts. Normally the concerts are every few weeks over a 3 month period, for a total of 9.

My question is – is there another license that is better suited for us? Rather than submitting the form 221 for each individual concert, could we apply for a license that would cover all 9 of the events? Our difficulty in the past has been applying for each individual license no more than 30 days out and not receiving the actual license until the day before or sometimes even the day of the event.

We’re setting up a beer festival with a non-profit. With the abundance of non-beer activities we have scheduled we’ve decided to charge a fee for entry only, doesn’t include the tasting glass.

We intend to sell event commemorative pint glasses at our vendor booth that can then be used for tasting. Considering it states that the admission fee is considered an alcohol sell and those proceeds must go to the non-profit, does the money we make at our vendor booth for selling pint glasses, which are a non-alcohol item, remains 100% ours?

The ABC specifies they do not regulate non-alcohol items sold at the vendor booth, they only regulate alcohol selling to which the admission fee, which allows attendees to drink, is considered an alcohol sell.

Justin – Yes, a Type 23 license permits the sale of wine, in addition to beer, in a “bona fide eating place” either on your licensed premises or in a bona fide eating place “contiguous to” your licensed premises. You will have to serve meals during the meal hours that you are open, and have the usual fixtures and equipment to prepare and serve the meals. This can include traditional fare or specialty entrees which combined with side orders and desserts, make a “meal.” Good luck with your venture. Lauren

Hey Lauren, not sure the proper place to ask questions regarding a California type 23 microbrewery question, so here goes:

With a California type 23 license is it permissible to also sell wine on-premise? We’re working on getting our type 23 and want to also serve food in our establishment, but want to plan accordingly for those that prefer wine over beer.

Sean,
You are correct in that a private party would not require a license. Just to clarify, a private party is an event that (a) is not open to the general public, (b) has no direct or indirect sales of alcohol, and (c) is not a place that is maintained for the purpose of keeping, serving, consuming or otherwise disposing of alcoholic beverages. If any of these 3 exist, then it is not a private party and a license is required. Direct sale of alcohol would be money or other consideration exchanged for alcohol. An indirect sale of alcohol would include things like admission fees that include alcohol, accepting donations, etc. You may have a bartender serve the alcohol, but the ABC has guidelines to ensure the bartender is not acting as a “licensed caterer.” The bartender:
1. May NOT pick up the alcohol and then be reimbursed for it
2. May NOT get paid in advance for alcohol, then pick it up and deliver it to the party site
3. May NOT be paid for alcohol sales–only for bartending services (otherwise he/she would be exercising the privilege of a licensed caterer and that would be illegal)
4. May NOT return the alcohol to the seller after the party (all alcohol belongs to the host)
5. MAY suggest to the host what alcohol to buy and how much
6. MAY bring equipment to the party
7. MAY be paid a flat fee or by the hour, and collect tips for services only
Be sure to stay safe and legal by having food and non-alcoholic beverages available; not serving minors or any guest who looks or acts drunk; and encouraging designated drivers. Good luck with the event. Lauren

Harry,
Often, licensees engage in activities not realizing what the rules are (or knowing the rules and doing it anyway, figuring they won’t get caught). However, Rule 53e CCR prohibits retail licensees from participating in winetasting activities such as arranging for it, giving a lecture on the wine, pouring, etc.

A Type 01 or 23 licensed beer manufacturer (but not a Type 75 brewpub-restaurant, which is actually a RETAIL licensee with different privileges), may sell beer to holders of a special daily license; may donate beer to the special daily licensee if the daily licensee is a nonprofit exempt under the Internal Revenue Code; and may assist the special daily licensee at a beer tasting off the beer manufacturer’s licensed premises; however, all samples or tastes must be sold. Lauren

There are two basic types of “daily” licenses for special events. Without looking at your non-profit paperwork, I don’t know which one you may qualify for.

A Special Daily Beer and/or Wine license allows the sale of beer and/or wine. It is issued only to existing nonprofit organizations. Rule 59 of the California Code of Regulations says it may be used for the following purposes: (1) Sales to members or guests of members of the organization at the site of and during an organized picnic, social gathering, or similar function of the organization; or (2) Sales to the general public from a premises temporarily occupied at the site of and during a county fair, civic celebration or similar event, or at a designated premises and during a fund-raising event sponsored by a nonprofit charitable, civic, cultural, fraternal, patriotic, religious, social or amateur sports organization.

A Daily On-Sale General license, on the other hand, authorizes the sale of beer, wine and distilled spirits (hard liquor). This one is issued only to organizations qualified under Section 24045.1 B&P Code. They are: Political party or affiliate supporting a candidate for public office or a ballot measure, an organization formed for a specific charitable or civic purpose, a fraternal organization in existence for over five years with a regular membership (e.g., Elks Lodge, Moose Lodge, etc.), or a religious organization.

The fee for a Special Daily Beer and/or Wine license is $25 per day for beer or wine; $50 for both beer and wine. These fees are per dispensing point. The fee for a Daily-On-Sale General license is $25 per day, per dispensing point. In other words, if you have two dispensing points, you would pay double the fee. There is no limitation on how many Special Daily licenses may be issued during one calendar year. However, a Daily On-Sale General license is limited to 12 days in one calendar year and not more than two consecutive days.

Licenses are issued at the discretion of the Department of Alcoholic Beverage Control (ABC). The ABC requires the property owner’s written approval. They may also require the police department’s approval, in some cases.

The first time a non-profit organization applies for a daily license, they must prove their tax-exempt status by showing the ABC their IRS and/or Franchise Tax Board documents. The documents must reflect the organization’s tax I.D. number.

To apply for a daily license, submit a Form ABC-221 to your local ABC District Office. This can be done in person or my mail.

I own a small 99-seat theater in LA and have a non-profit 501c3 organization for it.

We currently do not have any sort of liquor license for the venue. We are hoping to hold a “Summer Concert Series” and have anywhere from 1-5 concerts as fundraisers for the non-profit at which we would like to sell alcohol.

Is this doable with individual “Special Daily” licenses? And is there a limit to the number of Daily licenses we can have per month/year?

Rick,
I can’t really advise you on structuring your business model. However, if any beer is sold at a festival, all the proceeds from beer sales must go to the entity that obtains the ABC license. Lauren

Section 25503.55 of the California Business & Professions Code (“ABC Act”) and Rule 53.5 of the California Code of Regulations govern beer tastings. The following is an excerpt of Rule 53.5, which authorizes you to serve beer at festivals open to the public. You, as a Type 23 licensee, do not need any additional license or permit. However, the sponsoring organization must pull a “temporary beer license” from the ABC.

“A beer tasting is a presentation of samples of one or more beers, representing one or more beer manufacturers or industry labels, to a group of consumers for the purpose of acquainting the tasters with the characteristics of the beer or beers tasted.

Licensees may engage in beer tasting activities only as set forth in this rule. In addition to furnishing beers as provided herein, licensees may supply small amounts of bread, crackers, pretzels, cheeses or nuts to clear the taste buds of the participants between successive samples of beer during a beer tasting.
. . . (f) Exceptions.

(2) An organization holding a temporary beer license may accept donations, charge admissions, and otherwise make charges for beer to be served at a beer tasting, and may advertise such events, which may be open to the public. A licensed beer manufacturer or out-of-state beer manufacturer’s certificate holder may give beer to such a temporary licensee only if such temporary licensee is a nonprofit corporation or association exempt from the payment of income taxes under the provisions of the Internal Revenue Code of 1954 of the United States. Any other holder of a temporary license shall purchase all beers. Licensed beer manufacturers or out-of-state beer manufacturer’s certificate holders may assist the holder of a temporary beer license in conducting a beer tasting.

(3) No student organization, college fraternity or sorority shall sponsor a beer tasting.”

I recommend you review Section 25503.55 of the ABC Act and Rule 53.5 in their entirety so you know what you are authorized to do in other situations. You can search the ABC Act on the ABC’s home page at http://www.abc.ca.gov

You can find a link to Rule 53.5, on ABC’s home page as well. Go to “Laws, Rules & Regs,” click on
“CA Code, Title 4.” Click on Title 4, Business Regulations. Click on “Division1, Dept of Alcoholic Beverage Control.” Click on “Article 9, Samples.” Click on Sec. 53.5, “Samples Used in Beer Tastings.”

I am curious what type of license a Type 23 (Small Beer manufacturer)in California would need to serve beer at festivals, etc. I love your website, and would love your perspective on what a type 23 gives you the rights to in Cali.

Giving a tip (also called a gratuity) is a widely accepted social custom in the U.S. Tipping is when a patron makes an extra payment to a worker for their services, which is above the advertised cost of the service.

I assume you will be selling the beer, and you have, or will obtain, a temporary permit from the Indiana Alcohol & Tobacco Commission (ATC).

As a temporary permittee, the ATC regulates what you can and cannot do. The Commission’s website contains an application form for temporary beer and wine permits. The form lists nine “Do’s and Don’ts.” Tipping is not mentioned on the form, and I could not find it mentioned elsewhere in the liquor laws and rules.

However, the IRS and Indiana Department of Revenue also regulate your nonprofit.

A nonprofit corporation is by definition a corporation whose purpose is to engage in activities that don’t provide financial profit to the benefit of its members.

If the money in the tip jar goes to individual members or workers, the IRS or Department of Revenue may well have a concern about it. On the other hand, if your goal is to accept donations for the nonprofit rather than collect tips for your workers, it might be legal. Because I do not and cannot give legal or financial advice, I recommend calling a qualified Certified Professional Accountant about this. As a further resource, the Indiana Nonprofit Resource Network provides affordable referrals to nonprofits.

I hope this reply puts you on the right path to getting an answer to this technical question. Thanks for writing.

Thanks, Chris. In California, alcohol must be sold for at least 6% above cost. Also, reduced pricing of alcohol results in more consumption, including risky consumption by moderate drinkers. (Most of the injuries and deaths related to alcohol are a result of moderate drinkers engaging in occasional risky drinking.) So, I recommend keeping alcohol prices up to reduce the risk of excessive consumption. It’s also important to offer, and get creative with, a good selection of non-alcoholic beverages. There are a lot of people who abstain from alcohol and are looking for alternatives. Your point about promoting food is excellent, I just don’t think inexpensive alcohol is the best way to sell more food. I appreciate your post. Lauren

Hi, nice article. A local spot in Baltimore sells beer, liquor, wine and food for all the Ravens “NFL TEAM” home games. This amounts to around 8 to 10 time a year. They have obtained a one day liquor license through a NPO.
From reading your article its my understanding that you have to give 100 percent of the net proceeds from all alcohol sales to the NPO. So, since they can’t make any money off of alcohol and rely solely on the profits from food, why mark up alcohol at all? Why not sell it for a quarter or a dime above cost? This would insure a huge crowd for them to sell more food. I’m learning as I go… thanks Lauren

Just to make sure we are on the same page, let me define the “sale” of alcohol (which would require a license). Sale could be direct payment for alcohol from buyer to seller, or if a person buys a ticket for an event and that ticket entitles them to an alcoholic beverage, then that is a sale and there must be a license or permit.

That being said, if you as a non-profit are holding a one-time potluck fundraiser, and you would like folks to be able to bring their own wine, it would depend upon where it is being held. And I am assuming this is a one-time event and not an ongoing situation and venue that is being maintained for the purpose of drinking (that could be viewed as an illegal “bottle club”).

The venue you are using likely has their own rules about bringing in alcoholic beverages. And depending upon the venue, your expected attendance, etc., the city may be interested in knowing about it in advance.

If the venue is an existing ABC-licensed location, people may bring in their own wine (that is, if the ABC license permits the sale of wine for consumption on the premises). The venue may even charge a corkage fee. However, I personally don’t think this is a wise idea to allow this because it is too hard to monitor alcohol consumption and cut people off if you need to. And, by the way, if people bring in their own wine into a licensed premises, it doesn’t mean they can leave with a partially-consumed bottle. The wine would have to be purchased at the licensed premises for the guest to be able to leave with a partially-consumed bottle.

I hope this helps. If you’d like to share the type of venue you have in mind, I’d be glad to comment further or provide tips for a successful event. Lauren

I am trying to find out if you need a liquor license for a non profit 501C3 event if you are not selling. We would like people to be able to bring wine with their pot luck dinner to a cabaret show fundraiser.
Can you advise me?

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Lauren C. Tyson is a professional liquor license consultant with 29 years of experience at the California Alcoholic Beverage Control as an investigator, supervising investigator, and district administrator. She is a recognized expert in liquor licensing, liquor law enforcement and responsible alcohol service. Read More…